The Importance of Investment for Development Countries

Comparing Investment Achievements

According to data from the Indonesian Financial Services Authority (OJK) as of December 2024, the number of capital market investors in Indonesia reached 14.87 million people, or approximately 5.2% of the total Indonesian population, which was estimated at 285.13 million at the beginning of 2025. Meanwhile, based on the latest Gallup survey on May 5, 2025, 62% of U.S. citizens report having investments in the stock market. These figures show that investment participation among Indonesians is still far behind compared to developed countries, despite investment instruments now being more accessible, including mutual funds, retail bonds, and digital financial instruments.

Why Investment Matters

Investment is one of the most effective ways to build long-term wealth and counter the erosion of purchasing power due to inflation. If money is only kept in savings with low interest rates, its value will be eroded by inflation, whereas Indonesia’s inflation trend averages 3–4% per year. By placing funds in instruments that offer higher returns, such as mutual funds, stocks, or bonds, people can achieve asset growth that keeps pace with or exceeds the rate of inflation.

Benefits for Various Groups

Students and Young Generations:
Starting to invest early, even with small amounts, will give a long runway for the compound interest effect to work. For example, saving IDR 100,000 per month in an equity mutual fund with an average annual return of 10% over 10 years can grow several times over.

Productive Families:
Planned investing helps plan for children’s education costs, retirement funds, and emergency funds without disrupting family cash flow. Allocating funds to low-risk instruments like retail bonds can serve as a financial buffer in emergencies.

Retirees and Prospective Retirees:
For those nearing retirement, choosing a portfolio with a portion of bonds or sukuk can provide a regular income stream (cash flow) while preserving asset value.

Diversification as the Key

No investment instrument is “perfect”—all have their own risks and potential returns. Therefore, the principle of diversification is crucial: don’t put all your eggs in one basket. Combine several instruments (stocks, mutual funds, bonds, property, and even gold) to reduce market volatility risk over time.

Literacy and Increasing Accessibility

The digital era has bridged investment access: online apps, free education on official platforms (OJK, IDX), and investor communities on social media. People just need to choose the instrument that matches their risk profile. The government and financial institutions are also aggressively promoting financial literacy programs, so those who were previously unfamiliar can now learn to invest independently.

Overcoming Reluctance and Psychological Challenges

Many people are still reluctant because they fear losses or don’t fully understand investment mechanisms. However, by following a structured investment plan—such as dollar cost averaging (DCA)—market risks can be managed more calmly. Starting with small, regular amounts also helps build financial discipline and reduces psychological stress.

Investment is not just a trend; it is the foundation of financial independence that provides security for oneself and one’s family. By building the habit of investing, every Indonesian has the opportunity to narrow the asset productivity gap compared to developed countries and prepare for a more prosperous future. Let’s take the first step today—because great wealth is born from small, consistent decisions.